Firstly,
we're building a platform that allows holders of SHP tokens to earn
rewards for providing asset sentiment, which provides valuable input to
our investment models. By linking rewards to the quality of the
sentiment provided, we're able to ensure our platform offers the highest
quality of crowd-sourced sentiment analysis in the market.

Secondly,
subject to regulatory approval, we will be issuing a
'cryptoderiviative' token (SCD), which will pay dividends based on the
performance of our fund.

Artificial Neural Networks

We're
using neural networks at the core of our Machine Learning modelling
algorithm to look for patterns in financial data that are predictive of
future asset price.

ANNs offer powerful Machine Learning prediction cabailities, because they are inspired by the behaviour of the human brain.

Low-Cost Cloud Architecture

We have chosen to leverage the power of Amazon Web Services (AWS)
for our off-chain architecture. Amazon provide a large number of fullymanaged,
scalable, cost-effective services, enabling us to maintain a lowcost
base and operate in highly agile manner. A key distinguishing factor
between Sharpe Capital and many traditional investment funds, aside from
our novel approach to quantitative, sentiment & cognitive-behavioural modelling
of market movement, and our TLS, is that we will constantly strive
to operate as leanly as possible. This tech-driven, highly cost effective operating
model, combined with consistent market-beating returns, permits
us to deliver the highest return possible to our investors, rewards to sentiment
providers, and cost savings for users of our bespoke modelling tools
(wherein usage costs are shared in SHP, operating in a similar manner to
’gas’ in Ethereum for transaction processing/computation execution). The
AWS cloud architecture we are utilising is outlined in Bellow Image

Fundamental Analysis

Our
modelling is driven entirely by micro & macroeoconmic data. We do
not believe historical price is a reliable indicator of future asset
prices.

2016

April

Pre-Launch

University
friends, Lewis Barber and James Butler, meet in London and discuss the
feasibility of beating the stock market with algorithmic trading.

Nov

Quantitative Modelling

After reading a blog about predicitive modelling of commodity prices, Lewis consults James for help with some mathematics...

2017

Jan

Machine Learning POC

Inspired
by the Lumber conversation, Lewis and James decide to apply Machine
Learning algorithms to vast amounts of financial data, in order to
determine if the stock market is predictable.

Mar

Sharpe Capital is born

Encouraging
results from the Machine Learning POC leads to the formation of Sharpe
Capital, a 50:50 partnership between Lewis & James.

May

We started tweeting

Documentation of our journey begins via the @sharpecapital Twitter channel, where we start engaging with investors, hedge funds and the FinTech

Jun

Preparing our ICO

Work
starts on our Ethereum smart contracts, as we begin the mobilisation
phase of our business, and map out a roadmap to ICO & expansion.

Nov

ICO Token Sale

Our ICO token sale will commence on November 6, 2017 at 14:00 GMT. For more information visit the tokens page

2018

Q1

London Office

We will open our HQ in London, which will form the basis of our expansion as we start growing the business.

Q2

Growing The Team

The
team will include dedicated roles for; DevOps, Marketing, Operations,
Testing & Security. We will offer equity options to everyone
joining at this stage.

Q3

Alpha Platform

Our
Alpha platform will be available to an exclusive set of customers and
community members, who will help us refine our product before we move to
mass-market adoption.

Q4

Sharpe Hackathon

Sharpe will host a 48 hour Hackathon, where attendees will build, test and deploy investment models on our Alpha platform.

2019

Q1

Platform Launch

Our decentralised investment platform will launch for mass-market adoption in early 2019.

Q2

Live Trading

Sharpe
will start live implementation of our proprietary investment models,
designed & implemented in-house and verified during the Alpha phase
with small sums of capital.

Q3

1st SHP Rewards

The 1st rewards will be paid to SHP holders six months after our platform launch.

Q4

Hedge Fund Partnerships

We
will form strategic partnerships with up-to five hedge funds, who will
receive favourable execution fees in exchange for providing liquidity to
the Sharpe investment platform.

Token Sale

Distribution Mechanism

Sharpe (SHP) tokens will be rewarded
at the rate of 2,000 SHP per ETH. This rate will remain constant for the
duration of the ICO.

Once the ICO is complete, there will be no further minting of SHP tokens.

Website:

At
Sharpe Capital, we understand the importance of providing continuous
liquidity to newly issued tokens. Within the current regulatory
landscape, the delay between token generation and listing on traditional
exchanges is increasing, resulting in market failure.

While
decentralised exchanges do go some way to solving this problem, the
requirement for a counterparty with whom to trade still exists. In
emerging community economies, this can often result in illiquid markets. Enter: Bancor Protocol and smart tokens.

Why use Bancor?

The
team behind Bancor have developed a ground-breaking protocol for
providing liquidity to tokens on the Ethereum blockchain through the use
of currency reserves. Smart tokens act as an exchange medium between
themselves and their reserve tokens (e.g. ETH, BNT or any other ERC20
token). Market participants will always be able to liquidate or purchase
SHP tokens without having to find a counterparty to buy or sell the
tokens.

Bancor
achieve this with an asynchronous price discovery mechanism. In a
nutshell, this provides a mechanism to determine token price as a
function of the amount of SHP tokens being sold or bought, the total
supply of SHP tokens, the reserve balance, and the constant reserve
ratio. The constant reserve ratio defines the level of liquidity for SHP
tokens, and can be changed dynamically to ensure stability.
Arbitrageurs will maintain price equilibrium between the smart token,
traditional’ and exchanges.

Our Commitment to Utilising Bancor

We
have stated an intention to make all funds raised above our $45MM
requirement for delivering the Sharpe Platform and its associated fund
available for use in Bancor reserves. With a target in the region of
$60MM, this provides a maximum reserve size of $15MM. The diagram below
illustrates our budget assuming the upper target of $60MM is raised.

The Sharpe Capital budget allocation.

The
size of the reserve and the CRR are critical in determining both the
degree of liquidity (meaning the capacity for trading to move the token
price). Therefore, this will be distributed between a BNT reserve, a SHP
reserve, funds allocated to providing the price floor, and a private
reserve that can be utilised to ‘top-up’ liquidity under changing market
conditions. The following section describes our approach to finding the
optimal CRR and allocation of these reserves.

Determining Reserve Sizes and the Constant Reserve Ratio

It
is important to strike a balance between the size of the currency
reserve and the CRR. If the reserve balance is too high, relative to the
CRR, then price action is restricted and even large sales or purchases
of SHP would not have a large effect on the exchange rate. Conversely,
if it is too low, this will result in high volatility for those who use
the smart token to buy/sell. In a bearish market, this could quickly
drive the token to its price floor. Likewise, in a bullish market, the
price of SHP would rapidly increase. However, providing there exists
sufficient volume on other exchanges, arbitrageurs would drive the token
price to an equilibrium.

We
believe that the reserve size and CRR should be determined once the
total raise from the token generation event is known. To ensure trust in
the implementation of our smart token, we will create well-defined
rules for dynamically determining the optimal CRR value.

To
that end, we are working on development of a Monte Carlo trading
simulator utilising the Bancor Protocol, evaluating how various supply
sizes, reserve sizes, price floor mechanisms, and varying CRR values,
will affect the exchange price of an ERC-20 token utilising the ‘token
changer’ smart token method outlined in the Bancor white paper.
Our aim is to identify the optimal CRR and reserve size under varying
market conditions, from extremely bearish to extremely bullish.

This
tool will provide a mechanism for anyone using the Bancor Protocol to
provide continuous liquidity via the Token Changer smart contract to
determine the optimal values for their specific circumstances under
current market conditions. We will make this tool available for the
community to use once it’s in beta stages.

Sharpe Capital Announces Advisory Partnership with TaaS

TaaS and Sharpe Capital
are delighted to announce their exciting new partnership. The
TaaS — Sharpe cooperation agreement was finalized following a meeting at
the recent d10e Blockchain Conference in Kyiv, Ukraine, which was co-hosted by TaaS and attended by Sharpe’s co-founders Lewis Barber and Dr. James Andrew Butler.

“This
is a fantastic opportunity for synergy between the leading blockchain
fund TaaS and the Sharpe Platform suite of products…”

Sharpe
Capital is a FinTech organization developing a platform to crowd-source
market sentiment on global equities and blockchain assets, paying
service fees in Ether to users in return for their insight. Supplemented
with cutting edge, machine learning-driven linguistic analysis and
quantitative trading strategies developed in collaboration with leading
academic partners at University of California, Berkeley and the
University of Oxford, Sharpe Capital aims to deliver best-in-class
data-feeds for use by investors.

Sharpe
Capital will issue SHP tokens via the Ethereum blockchain during a 7
day discounted pre-sale beginning 6th November, with $1.4MM whitelist
registration places remaining. This will be followed by a 28-day crowd
sale, with a total cap of $20MM. SHP permits participants to provide
sentiment, and institutional investors to access their cloud-based
quantitative trading model tools. Sharpe Capital will also operate a
proprietary investment fund, both in global equities and blockchain
assets, with plans to issue a derivative token instrument tied to its
performance in Q1 2019. Sharpe Capital is seeking to raise $20 Million
through SHP issuance in November.

Chief
Investment Officer of Sharpe Capital, Dr. Butler, described the newly
announced advisory partnership: “It is a fantastic opportunity for
synergy between the leading blockchain fund TaaS and the Sharpe Platform
suite of products, including our market sentiment crowd-sourcing
application and machine learning-driven investment funds. TaaS Fund’s
advice has already proven invaluable and I’m really looking forward to
what will no doubt be a prosperous relationship for both parties.”

Dimitri
Chupryna, Co-Founder and a Managing Partner at TaaS will act as the
principal point of contact on the Sharpe Capital advisory board. Dimitri
graduated with a BA in Economics from the University of San Francisco.
Dimitri is an expert in business development and portfolio management.
His interests primarily focus on rapid-growth technologies.

TaaS
launched the first-ever tokenized closed-end fund dedicated to
blockchain assets in May 2017 right after its Token Sale concluded, with
$7.6 million USD(T) raised. During its first fully-operational quarter
TaaS participated in eleven token generation events with the total
amount contributed equivalent to 3 million USD(T). This delivered an
unprecedented 61% ROI and over 300% growth in market cap. Since then,
TaaS is actively continuing contribution and trading performance
accelerating integration and linkages within the cryptoworld.

About Sharpe Capital

Sharpe
Capital is a FinTech organization developing a platform to crowd-source
market sentiment on global equities and blockchain assets, paying
service fees in Ether to users in return for their insight. Supplemented
with cutting edge, machine learning-driven linguistic analysis and
quantitative trading strategies developed in collaboration with leading
academic partners, Sharpe Capital aims to deliver best-in-class
data-feeds for use by investors. Sharpe Capital was founded by CEO Lewis
Barber and CIO Dr. James Butler, supported by Chief Technology Officer
Israel Colomer, Systems Engineer Dan Pilch, and Lead Developer Ali Bros.

About TaaS

Token-as-a-Service
(TaaS) is the first tokenized closed-end fund that allows its investors
to capitalize on the rise of Blockchain markets. Utilizing the Ethereum
blockchain and its Cryptographic Audit technology, TaaS offers a brand
new comprehensive approach to capital raising, fund management, and
auditing with full transparency for its investors. TaaS token is
currently trading on Liqui, LiveCoin, Coss.io, CoinExchange and HitBTC.
TaaS was co-founded by blockchain pioneers Konstantin Pysarenko, Ruslan
Gavrilyuk, Dmytro Chupryna, and Maksym Muratov and has professional team
members from the USA, Ukraine, Poland, Romania, South Africa and China.
TaaS produced a 61% ROI for its first fully-operational quarter (May
1 — August 1, 2017) and as per its original White Paper, it paid 50% of
that to its token owners, reinvested 25% back into the fund so that it
grows in perpetuity and paid 25% to its management.

Sharpe Capital - SHP Token Sale: Now open until February!

There has been much talk recently of how token sales should be structured, with Vitalik himself offering several proposals
to mitigate ‘panic buying’ created when token sales have very limited
pre-sale windows and time restrictions. The UK Financial Conduct
Authority also recently lamented
the number of token sales that are not backed by an existing product
and the highly speculative nature of participating in these sales — our
platform will now be live and usable before the token sale concludes.

We’ve
reached out to many of our SHP token sale participants, and those who
registered their interest on our whitelist and waiting list. Many wished
to participate but felt that the minimum pre-sale contribution was too
high, and others have been delayed due to the recent issue with Parity multisig wallets, and general blockchain asset market conditions.

At
Sharpe Capital, we have always been highly responsive to community
feedback. Indeed, community-led governance is a core component of our
platform, in which SHP owners can table motions for voting to guide the
direction of the Sharpe Platform.

Therefore,
we are pleased to announce that we’re changing the structure of the
token sale going forward in response to everything that’s happening in
the world of blockchain right now.

Firstly,
we are extending the token sale until February 5th 2018. The platform
will still be launched on 11th December, and those using the platform
will receive their first ETH payment in January, with payments being
issued monthly going forward.

Secondly,
we are retaining the bonus tiers for larger contribution sizes
throughout the sale, to avoid creating a false sense of urgency and to
enable interested parties to come to an informed decision, utlimately
allowing SHP to find its true market value. We are introducing an
additonal bonus tier, in which participants will receive 5% extra SHP
for contributions over $1,500 USD in ETH. This new tier will come into
effect on Monday 2pm GMT, for those wishing to contribute $1,500–10,000
USD nominal.

Finally,
after 11th December — when the platform launches — the offered rate of
SHP/ETH will fall by 100 per week, until it reaches 1400 SHP per ETH.
This rewards early participants who purchase SHP before the platform
launches, incentivising users to engage with the Sharpe Platform,
enabling us to test and refine the payment mechanisms during the Alpha
period.

To
summarise, the sale will remain open until February 5th 2018. The
minimum contribution will be $100. The following bonuses will apply
throughout the sale:

$1,500 — $10,000 → 5% Bonus

$10,000 —$50,000 → 10% Bonus

$50,000 — $250,000→ 20% Bonus

$250,000 — $500,000 → 30% Bonus

The value of USD/ETH will be re-pegged to the current market rate every Sunday throughout the sale.

Contact Us & Find Out More

Sharpe Announcing Exciting New Co-operation Partnership with ETHLend

November 20th 2018, London — Sharpe Capital and ETHLend are delighted to announce their exciting new cooperation partnership.

The
Sharpe-ETHLend partnership was finalized following a meeting at Web
Summit 2017 in Lisbon, Portugal. The newly established relationship
provides ETHLend with privileged early access to the Global Sentiment
Index data-feed during its Alpha and Beta developmental stages,
delivering realtime insights into how the market perceives individual
blockchain assets. Sharpe and ETHLend will work together to refine the
product and optimize the product for further commercialisation.

This
partnership is a key proof of the value of one of Sharpe Capital’s core
products and future revenue streams — Sharpe is working to ensure the
Global Sentiment Index becomes the world’s leading source for market
sentiment data.

Sharpe Capital Co-founder & CEO, Lewis Barber, at Web Summit 2017

Through
collecting real human insights and combining them with cutting edge
machine learning, Sharpe can far surpass the traditional approach to
sentiment analysis derived from often highly unreliable analysis of
social media feeds and news sources.

By
joining forces with ETHlend, Sharpe Capital is able to tailor the
Global Sentiment Index to an increasingly diverse customer base, and
help to reduce risks associated with blockchain-driven lending — Dr.
James A. Butler, Co-founder and COO at Sharpe Capital

Sharpe
Capital is a FinTech organization developing a platform to crowd-source
market sentiment on global equities and blockchain assets, paying
service fees in Ether to users in return for their insight. Supplemented
with cutting edge, machine learning-driven linguistic analysis and
quantitative trading strategies developed in collaboration with leading
academic partners at University of California, Berkeley and the
University of Oxford, Sharpe Capital aims to deliver best-in-class
data-feeds for use by investors.

ETHLend
has been available since May 2017, providing a global lending market
where all loan conditions are agreed between borrowers and lenders, and
parties can participate on both sides. ETHLend is a transparent,
borderless and decentralized market and erasing interest rate
differences between countries by providing competition on a global
scale. ETHLend solves key issues regarding collaterals, decentralized
credit rating and exchange volatility risks with fiat pegging option

Through
partnership with Sharpe Capital, ETHLend lenders will now access to the
leading source of decentralized and crowdsourced asset sentiment,
allowing lenders to assess collateral risk on loan request using
real-time data from the Global Sentiment Index before choosing to fund a
loan — Jordan Gustave, Chief Operating Officer of ETHLend

Going
beyond simple metrics of price and implied volatility, the Global
Sentiment Index will let users know precisely how the market perceives
an asset’s viability over timeframes from one week to one quarter.
Following the Sharpe Platform launch on 11th December, ETHLend will have
access to the Global Sentiment Index as it is collaboratively developed
and refined during the Alpha and Beta stages of the product.

***

About Sharpe Capital

Sharpe
Capital is a FinTech organization developing a platform to crowd-source
market sentiment on global equities and blockchain assets, paying
service fees in Ether to users in return for their insight. Supplemented
with cutting edge, machine learning-driven linguistic analysis and
quantitative trading strategies developed in collaboration with leading
academic partners, Sharpe Capital aims to deliver best-in-class
sentiment-based data-feeds, including the Global Sentiment Index, for
use by investors and risk-assessors. Sharpe Capital was founded by CEO
Lewis Barber and CIO Dr. James Butler, supported by Chief Technology
Officer Israel Colomer, Systems Engineer Dan Pilch, and a world-class
team of engineers, developers and business development advisors. The
Sharpe SHP token sale is now live, allowing you to earn ETH for your
sentiment toward blockchain assets and equities. Visit Sharpe.Capital to
participate today!

About ETHLend

ETHLend
is a fully decentralized peer to peer lending dApp founded by Stani
Kulechov, to lend and borrow crypto by using any ERC20 token as a
collateral
Being decentralized and transparent, no-one can stop
lending or borrowing transactions, not even ETHLend. Everything goes
through Ethereum Smart contracts and no assets are held by ETHLend.
Every transaction is visible as they can be seen on any block-explorers.
You
do not need a bank to lend or borrow. You are your own bank on the
Ethereum network, loans are sent within seconds or minutes. No
middle-men, just the borrower and lender
Strong of a 20 people team
scattered around the globe, ETHLend has everything needed to become the
go-to place for crypto lending. Enroll to the KYC-whitelist to
participate to the token sale

At
Sharpe Capital, we’re building a decentralised ecosystem to help retail
traders and institutional investors better understand financial
markets.

This
ecosystem is driven by the Sharpe Platform, in which users receive ETH
service fee payments in exchange for acting as sentiment providers,
making predictions on blockchain assets and equities based on current
events.

This month, our proprietary investment fund
generated an 85% ROI benchmarked against USD. We allocated 40% of
profit derived from the fund to distribute to users this month,
totalling $105,000.

As
the first month of the Sharpe Alpha being live comes to a close, ETH
service fee payments are due to be issued to platform users on 13th
January. SHP is available for purchase during the ICO until 5th February 2018, with the second payout slated for 13th February.

Approximately
15,000 predictions have been made on assets by over 100 registered
sentiment providers on the Sharpe Platform alpha. The average payout per user equals $972,
whilst the specific amount depends on the number of predictions
provided (proof-of-work) and the amount of SHP held (proof-of-stake). As
the one month time horizon has not elapsed for most predictions, total
number of predictions were used to calculate service fees for January.
Accuracy will be reflected in each user’s reputation score going
forward.

The
whole Sharpe team would like to take this opportunity to give an
enormous thank you to our community of supporters for contributing to
the Sharpe Platform, both through providing sentiment and purchasing
SHP. We have had a stellar first month and look forward to continued
success as we begin to scale and grow our revenue streams.

Month one: By the numbers…

The table below includes some key statistics from month one:

The average service fee payment this month per SHP token staked is $0.02, reaching $0.12 for those with the highest work and stake.

This plot illustrates the distribution of service fee payments, with each dot corresponding to a user.

The
following chart shows the service fee received for each user (vertical
axis) based on the amount of SHP owned (horizontal axis). The variation
across users with similar stakes arises from different numbers of
predictions made on the platform.

SHP Owned

About Sharpe Capital

Sharpe
Capital is a FinTech organization building a decentralised ecosystem to
help retail traders and institutional investors understand financial
markets better. We crowd-source market sentiment on global equities and
blockchain assets, paying service fees in Ether to users in return for
their insight. Returning 85% ROI from the Sharpe proprietary investment fund,
Sharpe Capital will distribute $105,000 over 108 registered sentiment
providers on Saturday 13th January, averaging $972 per user. The next
payment is scheduled for 13th February, and SHP tokens are available to
purchase until 5th Feb. SHP ownership is required to use the Sharpe
Platform. Visit Sharpe.Capital to participate today!

Supplemented
with cutting edge, machine learning-driven linguistic analysis and
quantitative trading strategies developed in collaboration with leading
academic partners, Sharpe Capital aims to deliver best-in-class
sentiment-based data-feeds, including the Global Sentiment Index, for
use by investors and risk-assessors. Sharpe Capital was founded by Lewis
Barber and Dr. James Butler, supported by Chief Technology Officer
Israel Colomer, and a world-class team of engineers, scientists,
analysts, developers and business development advisors.

The Sharpe SHP token sale is now live, allowing you to earn ETH for your sentiment toward blockchain assets and equities.

Contact Us & Find Out More

Sharpe Capital April Service Fee Payments: Month 4

We
are pleased to announced that our fourth service fee payment and prize
draw has been successfully completed as of 13th April 2018. It has been
an admittedly challenging quarter, with both the cryptocurrency market and US stocks
in significant decline. Despite this, we are pleased to be in a
position to provide our Sentiment Providers with $17,000 USD
(equivalent), plus 10,000 SHP.

We
have exciting news regarding several investments in the crypto space to
announce in the coming week, both private equity deals and in token
pre-sales — including a $200,000 investment in equity and tokens for a
fully decentralised derivatives exchange, supporting both blockchain and
traditional assets. Sharpe takes a ‘value investment’ thesis, and in
light of the recent downturn in US markets, we are working to expand our
strategy to focus our equity allocations toward emerging markets, with
particular interest in Sub-Saharan Africa. We recently hired a market
analyst to work with us on that (welcome to the Sharpe team, Max!), who will be sharing more information on our refined investment thesis in due course, so stay tuned for that!

Service Fees received (ranked highest to lowest) vs Proof-of-Stake and Reputation Score

The
chart above shows service fees received (ranked highest to lowest),
relative to their proof-of-stake and reputation score. We can clearly
see an increase in the ‘volatility’ of reputation scores for users with
the highest proof-of-stake, due to the larger number of predictions
provided, and therefore a greater opportunity for the reputation to move
from the default of 50. We can investigate this further be looking at
the relationship between reputation and number of correct predictions
provided:

Reputation vs Number of Correct Predictions

We
can clearly see in this chart that users providing more correct
predictions (ignoring incorrect predictions) are more likely to have a
higher reputation score. We are consistently seeing outliers who deviate
significantly from the average reputation score of 49.81, and although
it is still early days with just four months of data collection, we are
seeing notable persistence month-to-month in the accuracy of user
sentiment. We will share our insights as we begin to perform more
rigorous analysis of the sentiment data we are collecting, with all
early indications suggesting it will be an incredibly valuable data-set
for fund managers.

The
distribution of user reputation scores ranked from highest to lowest
are shown in the chart below. We are currently developing a leaderboard
to be built into the platform, and will share the designs we have for
this in our next status report, due next week.

User Reputation Scores by Rank (highest to lowest)

We’d
like to close by saying a massive thank you to our community of Sharpe
supporters. We are optimistic for Q2 in the crypto-markets, have a whole
raft of new features to roll out, and confident that our ever-improving
investment strategies will help Sharpe to see continued success.

How Can I Buy SHP?

May Service Fee Payments: Month 5

We
are delighted to announce that our fifth service fee payment and prize
draw has been successfully completed as of 12th May 2018. The Sharpe Fund has performed remarkably well following a difficult open to 2018, achieving 26% ROI
(year-to-date), despite the crypto market taking an approximately 25%
hit. We are therefore very happy to announce our second largest service
fee payment to date, coming in at $70,000 USD (equivalent, spot rate $700 USD/ETH) averaging $255 per sentiment provider, plus 10,000 SHP. This brings the total amount distributed since our product launch in December 2017 to $312,000 USD (equivalent) and 30,000 SHP.

There has been some interesting discussion
within the community recently, on the role of media pundits, analysts
and prediction markets — specifically relating to reputation. Sharpe
published our mathematical approach to quantifying and immutably storing
user reputation on the blockchain long before the debate had even
begun. Sharpe differs from a prediction market, in that we curate
sentiment on blockchain assets and equity markets, paying users an ETH
service fee for each correct ‘prediction’. By coupling these payments
with the users staked SHP (a metric for their confidence in the market
and their own ability) and the users reputation (a metric that captures
their long term, historical accuracy), we can understand what the market
as a whole is thinking — producing contrarian market indicators from
those with low reputations, and positive market indicators from those
with higher-than-average reputations.

The
Sharpe platform effectively incentivises users to provide honest data
by rewarding users in proportion to their immutable reputation score.
Users with the highest Sharpe reputation received a 20% premium on their
service fees compared to those with the lowest reputations. We can see
this in action by looking at the cents (USD) received per user, per
correct prediction, per SHP token hold as a function of their
reputation:

As
our fifth month of distributing service fees draws to a close, we have
seen the distribution between the highest and lowest user reputation
scores continue to diverge, as those at both end of the distribution
continue to move away from the mean. We have begun developing various
metrics to ‘slice’ the sentiment data we’re collecting, as we now have
over 1 million data points over a five month window on 600 assets across
both equities and crypto. We will share more insights as we begin to
understand the complex relationship between user reputation, time spent
per prediction, and user proof-of-stake.

How Can I Buy SHP?

Sharpe Centuri Platform — Exploring Sentiment Data #1

Since
the launch of the Sharpe Centuri platform in early December 2017, our
users have provided over a million predictions on the direction of
S&P500 stock and cryptocurrency prices. We have performed an
analysis of the first 5 months of predictions and will briefly highlight
some insights we have gained into the behaviour of users and the
quality of their work.

Sentiment data matured by the 26th of April 2018 (748k predictions) was filtered for active users who had provided a minimum of 500 predictions for at least 4 weeks. The following measurements were observed for this dataset:

Predictions included after the cutoff criteria: 648k

Unique user accounts: 258

Median delay between predictions across all users: 1.0 seconds

Reputation average ± standard deviation: 49.31 ± 1.42

Lowest reputation: 43.47

Highest reputation: 53.43

Whilst
the majority of predictions (87%) have been provided by users who
appear to actively use the platform, a large proportion of users have
indeed focused on getting through predictions at a rather brisk pace,
spending approximately a second per prediction. Below we show how the
delay between predictions relates to the number of predictions and user
reputation.

Looking
at the number of predictions performed by the users and the resulting
accuracy, we found that overall the users have some room for
improvement. As users make more predictions, their overall ability to
predict 500 different stocks or 200 different cryptocurrency assets
approaches a mean accuracy of 50%, suggesting that it is difficult for
users to improve the reputation score.

With
approximately 3000 predictions per month available to users, it is
evident that the vast majority (but not all) users have just about
enough time to read the title of the asset before casting a vote on the
direction of that asset. Moreover, this appears to have little impact on
the resulting reputation score, which to many will suggest that proof-of-work
is the easiest way for maximising payouts. As a result, we have been
looking for ways to increase the importance of the reputation score
without altering the underlying calculations. Many factors could be at
play here and we will be considering all of the following scenarios to
encourage the users to focus on improving their reputation score:

(1)
Users do not yet have an overview of their own performance on different
assets and the quality of the individual asset sentiment they have been
providing. This will be addressed by allowing users to look back
through the history of their predictions and learn from their past
performance.

(2) Users have too many predictions to do and cannot afford to spend much time per prediction, but want to maximise payout through proof-of-work. We will reduce the number of predictions that need to be completed to alleviate the rush to the finish.

(3)
All users currently get the same assets, with no control over which
assets are presented to them. From a user experience perspective, we
understand that being able to navigate the possible prediction lists by
sector or the prediction time scales would encourage users to seek out
better opportunities to increase the number of correct predictions, and
therefore improve their reputation score over time.

The
dataset was further grouped by assets in order to determine if some
assets are better predicted by all users taken together. This approach
assumes that we can trust all users to give sentiment on all assets, and
the majority rule would suggest the consensus direction of the price.
The matured sentiment was grouped into weekly bins (approx. 100 matured
sentiment per asset per week), quantifying the number of users that
predicted the asset direction correctly. The top 10 assets ordered by
the average sentiment accuracy over a 3 month period presented below
suggest that there are certain assets that all users taken together can
predict the direction of the market by consensus. The average
correctness over the 3 month period for those assets is ~60%, possibly
giving an edge in predicting the market, but not without false positive
predictions made for certain weeks on some assets.

On
the other hand, looking into assets that were incorrectly predicted by
consensus user sentiment (average <40% over the period) — we find
that all of them are cryptocurrency assets. It appeared that users were
especially good at predicting the direction of the market during the
mid-April bull run. The exact
nature of why there are stark differences between the ability of users
to predict cryptocurrency and stock markets would require further
observation of user predictions over time, including user behaviour when
making predictions of these markets against USD.

Interestingly,
whilst the majority of users are correct 50% of the time across all
assets as evident by the mean reputation score of ~50%, looking deeper
into individual user data we found that we can identify single users
that may be exceptionally good at predicting specific stocks or crypto
assets maturing in the same week. Specifically, we found that
approximately a third (~90) of our users have consistently predicted the
direction of one or more assets correctly at least 80% of the time over
at least 6 independent events — these could be seen as trusted users in predicting their respective assets.

We found that relying on data provided by trusted users gives a significant boost in determining the direction of the market, with over 80% of a sample of 5–10 of those trusted
users agreeing on the price direction for these assets each week. It is
worth noting that the sample size for interpreting the quality of
predictions at such an individual asset level for most assets is
small — but will be investigated in a couple of months down the line
once more data has been collected. This approach does however suggest
that certain users have certain knowledge that they excel at, and we can
capture this by monitoring their consistency across different assets in
order to get a better understanding of the direction of each asset
across such users. In the future, this gives us the opportunity to
present users with assets that they predict consistently better.

During
the coming months we will be rolling out updates that will address the
first scenario targeting the reputation score significance (alongside
other UI/UX updates), however we believe the last two scenarios cannot
be addressed separately from one another and are likely to be
implemented together in a single update towards the end of summer. The
ultimate goal is to bring an engaging experience for the users and
improve the overall quality of individual sentiment provided.

Overall,
there are fascinating consistencies arising among approximately a dozen
of users over a handful of assets on the platform. With the marketing
activity kicking off this summer we will expand the user base and make
improvements to give users more opportunities to learn and improve their
quality of work. The product is still in the early stages of its life
cycle and we will continue to monitor the performance of users to better
understand their interactions with the platform in order to make Sharpe
Centuri a rewarding experience for everyone.